LL Voids Zorkmid Gambling!
by Alphaville Herald on 27/08/08 at 8:00 am
Lab changes its mind about Z$ gambling scheme — was Zara Linden overruled?
by Pixeleen Mistral, National Affairs desk
1Z$ = 1L$ — now closed until further notice
Second Life’s Z$ casinos disappeared Monday, after the Linden game gods apparently changed their minds about the legality of the Zorkmid Z$ gambling system. Z$ casino owners had claimed their system exploits a loophole in the TOS and RL laws by using a fictional currency for gambling, and allowing players to play a game of skill to turn the Z$ fictional currency into the L$ fictional currency. Linden Lab and others provide foreign exchange markets that allow L$ to be converted into non-fictional currency such as $USD.
As I toured the devastated fictional casinos, the owners did not seem pleased with Linden Lab. denjobi Odell told me, “well it was a loophole .. never official .. and so .. LL changed its position again and told all the loophole gambling systems to shut down before monday”.
transactions on the Z$ system have been temporarily suspended
Linden Lab has approximately 250-300 employees, many of whom spend significant time in-world. The game gods have been known to meddle in the affairs of mere mortal players – and the players have made an art out of venue shopping for favors and opinions from the Linden staff. This may explain how credible claims have been made of some Linden staff approving the Z$ gambling scheme – but it appears that one faction of the Lab was ultimately being overruled by another.
As Aargle Zymurgy explained to me, “the Linden lawyers, apparently due to pressure from persons unknown, changed their minds about what they had reviewed so many times before”.
This appears to be a change in direction for the Lab, if we can believe the chatlogs being circulating in which Zara Linden says “the system (the one we have seen) requires you to play a skill based game to get a payout in L$ which makes it legal”. Was Zara overruled, or was the chatlog faked? In the hall of mirrors that is the interwebs, the world may never know the truth.
Much of the blame for the confusion around gambling and other controversial issues can be placed on the Lab’s governance system – a system in which details of abuse reports and rulings are never made public. Without any transparency in the AR process, residents have no clear idea of how the game gods choose to interpret the Terms of Service – the virtual law of the land. While this approach may allow the Lab to hide inconsistent enforcement from public view, in the long run it creates such a climate of uncertainty that only the extremely brave and the foolish treat SL as a serious business platform – despite claims of the fanboys.
Zorkmid zone is now empty
Will Well
Aug 27th, 2008
To complete the information in this article: not all systems are banned, the beanssystem is still operational. http://slurl.com/secondlife/BickyBeans%20Palace/134/56/663/
FlipperPA Peregrine
Aug 27th, 2008
I can’t say I’m surprised. I doubt Aargle’s comments that Linden lawyers “had reviewed so many times before.” Zara is not an attorney, as far as I know. This seems to me like someone on the governance team took a quick glance, thought it was like Jeopardy or Tringo, and didn’t realize that it was still illegal gambling. Once the story broke, the legal team probably got involved and said, “Are you nuts? Of course this is illegal, unregulated gambling!” I also blame the casino owners for bragging about Linden approval. I doubt any of them had attorneys representing them who had a full dialog and contract in place with Linden Lab before opening and saying “LINDEN APPROVED! zOMG!”
pickles
Aug 27th, 2008
Zara Linden is one of the most worthless people in the world.
You will NEVER get a straight answer out of her. No matter what the question.
As I’ve said before, the only Linden that doesn’t suck is Torley.
How about a list of what *IS* allowed? Can we get one of those? Items that HAVE been cleared?
Of course not.
Steve
Aug 27th, 2008
Give you head a shake! You really thought that this was legal? Imagine if this was tried in real life. Say a club offered you to buy chips so you could play blackjack, poker or slots. When you were done at the end of the night, they would ask you to complete an easy game of skill and they pay you out in US dollars. Now I ask you, would this be legal in real life in the USA for this club to do this? If you really think so, go ahead and do it and I will come and visit you with a thick piece of plexiglass separating us and we can discuss how prison life is treating you!!!
Really, if it is not legal in real life, how can it possible that it would be legal in Second Life? I have to wonder where these developers get there legal advice but perhaps they should consult a lawyer instead of resorting to the current source of legal advice!!!
Artemis Fate
Aug 27th, 2008
Called it last time this was mentioned. No surprises here.
Loopholes only work when the people enforcing them are insanely strictly bureaucratic, that even when the system is intricately set up to avoid the certain wording or whatever of the law, they can’t just go “Well the end result is the same, so we should consider it the same.” This Zorkmid nonsense was obviously online gambling with a “It’s play money that pays out with a ‘skill’ game! *wink wink*”, and so it wasn’t fooling anyone that it wasn’t online gambling sleazebags trying to bring back the lost art of ripping off idiots to Second Life.
Linden Labs has a long history of banning first and asking questions never. I don’t know why this guy thought this ridiculous little scheme would somehow tie Linden Labs hands and make them not act on what is clearly an online gambling scam.
He even plastered signs all over the place saying “To make gambling legal”? What a moron. At least if you’re going to start this whole charade of “It’s not real money though!” you can at least play a long with the “It’s not really gambling, it’s like an arcade!” bullshit line he was spewing everywhere else.
Arwyn
Aug 27th, 2008
Dirrected at Steve:
How can something not be legal in RL and be legal in SL? Look at prostitution. Very popular, very big in SL. Very illegal in many areas of RL. Gambling is perfectly legal in many places in RL, but illegal all over in SL. I think there is a way to bring gambling legally to SL, but it would involve having to apply for a casino license, like in the real world, and being willing to undergo constant checks to make sure you were running a tight ship.
I didn’t think the Zorkmid thing would last, but it was very clever, and I applaud the creators of it. I think that if it had been pulled differently, where you couldn’t transfer the $Z back into $L but instead redeem them at a prize shop like a Chucky Cheeses, it would have been legal.
Sen
Aug 27th, 2008
I’m actually surprised that no one took the pachinko model from Japan et al as a way to get round this gambling ban. I don’t know how legal it would be or not in the SL context but I’m still surprised that no one has at least tried it (or did they and I missed it?)
http://en.wikipedia.org/wiki/Pachinko#Legality_and_crime
“The winnings are in the form of more balls, which the player may either use to keep playing or exchange for tokens (typically slits of gold encased in plastic), vouchers, or a vast array of prizes. First, when players wish to exchange their winnings, they must call a parlor staff member by using the call button located at the top of the machine they used. The staff member will then carry the player’s balls to an automated counter to verify how many they have. After recording the number of balls the player won and the number of the machine he or she used, the staff member will then give the player either a voucher or card with the number of balls inputted into it. It is this voucher or card that the player must hand in at the parlor’s exchange center to get their tokens or other prizes.
Some prizes are as simple as pens or cigarette lighters; others can be electronics, bicycles, 50 cc scooters or other items. Under Japanese and Taiwanese law, cash cannot be paid out directly for pachinko balls, but there is usually a small exchange center located nearby (almost always separate from the game parlor itself) where players can conveniently exchange their winnings for cash. This is tolerated by the police because, on paper at least, the pachinko parlors that pay out goods and tokens are independent from the exchange centers that trade the tokens in for cash. Some pachinko parlors may even give out vouchers for groceries at a nearby supermarket.”
Artemis Fate
Aug 27th, 2008
“This is tolerated by the police because, on paper at least, the pachinko parlors that pay out goods and tokens are independent from the exchange centers that trade the tokens in for cash. Some pachinko parlors may even give out vouchers for groceries at a nearby supermarket.”
Also: Pachinko parlors are usually Yakuza run.
Steve
Aug 27th, 2008
Directed at Arwyn response:
Direct you to read the current gaming laws within the United States regarding internet gaming, gaming by wire as well as gaming with monies from credit cards. You actually would not be able to trade the chips for “prizes at Chucky Cheese” as if the prizes were of value, it is viewed as the same as if you received dollars…
I was reading on this a bit and am amazed on the report that states that a large majority of the Second Life casino’s (past and most recently Zorkmid related) are owned and operated by US residents. Do they understand that Linden Labs closure of the casino’s was based on involvement with government authorities including the FBI. I am pretty sure that Linden Labs complied with the authorities requests and would not doubt if contact information was not also provided for those owners. Sure glad that common sense stopped me from jumping on the casino greed wagon as it heads into the waiting arms of those government federal officers.
IntLibber Brautigan
Aug 28th, 2008
Of COURSE there are skill based payout gambling games in RL. For instance, you can legally raffle off your house in most states, while some require there to be a ‘game of skill’ involved, what most do is require entrants submit a 300-500 word essay about why they should win, or something similar. This sort of thing happens quite frequently and is considered perfectly legal by authorities. Google it.
And a RL house is worth a hell of a lot more than a few L$.
Geeze you people really aren’t that bright.
Sen
Aug 28th, 2008
“Also: Pachinko parlors are usually Yakuza run.”
Perfectly true.
For this model to work, all that has to be done is for the sim owner to run games of skill that rack up points in some way. When players want to cash out at the end of an game session, they simply get an attendant avatar (or perhaps a simple script can monitor the play) to recognise the final score and award inventory items as a prize based on that score. However those inventory items could then be “bought back” from the player for L$ at a completely different sim or perhaps even off-grid entirely? That way, only a token prize is being given for playing the games of skill. And surely what an avatar chooses to do with its inventory items i.e. sell them to other people is their own choice and perfectly legal?
Not sure on the practicality or legality of all this though so someone else can pick this ball up and run with it if they choose.
ob-wan
Aug 28th, 2008
@Arwyn
Prostitution in RL is not the same as RL. In SL you never pay anyone for real sex. Prostitution in SL is just like Webcam shows and Phone sex services in RL which is legal.
But gambling in SL is with real money. As long as L$ can be converted into real money. RL rules apply to it.
Alyx Stoklitsky
Aug 28th, 2008
In related news, the sky is blue.
Cai Pirinha
Aug 28th, 2008
LL Voids Zorkmid Gambling!
http://orly.yarly.org/orly.jpeg
Gaius Goodliffe
Aug 28th, 2008
Yup, the sky is blue, and in SL, you can fly in it, even without a pilot’s license. Someone notify the FAA… :p
By the way, after reading the chatlog in question, I do have to ask, where did Zara get a law degree? Alternately, if Zara is not a lawyer, why would anyone be surprised that Zara’s personal opinion on the legality of something turns out to be false? Something doesn’t become legal merely because a Linden says so. Anyone who finds this surprising is taking the “game gods” thing way too seriously. It seems a common practice on various SL-related blogs to elevate Lindens above the status of being mere employees of a tech company. They aren’t gods, never were. They aren’t even necessarily legal eagles.
This story could be summarized as: “ZOMG a Linden made a mistake!!!1! Foolish fanboys, can’t you see LL isn’t perfect???? You can’t consider something a serious business platform if its employees aren’t *really* gods…”
Alyx Stoklitsky
Aug 28th, 2008
I also have to agree with Pixeleen on at least this one point: treating Second Life as a business platform may work from a cottage industry standpoint, but it’s not for empire building unless you have a very large amount of money to start with. Read this as, “enough to buy several hundred sims at a time” here – starting out with less than that much money is a fool’s errand. I don’t know anyone who’s tried this who is doing much more than breaking even at best, or hemorrhaging cash as an average condition.
The GTeam applies the rules unevenly – operations that should be shut down entirely due to extensive fraud and money laundering still operate (I work for one of these, actually, and yes, there are some problems we’re dealing with), while most of the rest are simply left standing in the hall waiting for them to do something constructive.
One major CEO of a (former) major presence in SL once said, “I’m never coming back to SL again – it looks like shit and people fuck on the floor.” If Linden Lab needs any more proof than that that they’re going about this the wrong way, the whole operation is doomed anyway.
Nikola Shirakawa
Aug 28th, 2008
I wonder what would happen if someone created a system whereby money is deposited a la SL Exchange, then the gambling itself was done on a website out of the grid, with the winnings transferred back into SL? It seems to me that, going by the wording of the ToS regarding elements like disclosure, SL takes no responsibility for third-party sites, and the use of L$ to gamble with could still be fulfilled. I wonder if it would be considered as one big system, or separate systems, the SL component of which would be in full alignment with the ToS
Penis Venkman
Aug 28th, 2008
Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr Durrrr
^— Collective sound of all individuals who bought into this.
Corona Anatine
Aug 29th, 2008
But gambling in SL is with real money. As long as L$ can be converted into real money. RL rules apply to it.
er no
RL US rules apply to it
which is why it is unlikley that how things are done in Japan is unlikley to matter to LL
Adam
Aug 29th, 2008
Okay, I am confused because as of this morning (almost five days after the Zorkmid ban), casino location such as ! Zyngo & Casino V.I.P / Mexico-International (Rossini Island 5 53,101,499) are operating the Gold Nugget gambling systems from LL Gaming not to forget BickyBeans Palace (BickBeans Palace 126,55,662) is operating the BickyBean system. Both of these systems allow you to purchase gaming chips (either Gold Nuggets or BickyBeans) and then gamble of slots, roulette, blackjack with the winnings converted (in the case of BickyBeans without any skill game required) back to Linden Dollars.
Why are these systems any different? The casino operators are large established casino’s – do they know something that the rest of us are missing?
If I understand correctly, you are not allowed to gamble or place wagers in Second Life in which the winnings include anything of value (or in the above cases Linden Dollars winnings).
Truly confused now…
Alyx Stoklitsky
Aug 29th, 2008
I’m sure if you thought about it long enough, you could come up with a way to sneak gambling through the arbitrary maze of Linden rules, but really, what’s the point? The rules aren’t laws, they’re guidelines, and the Lindens can change them whenever they want. If the guiding principle is “no gambling”, then the Lindens will just tweak the rules till they fit the situation anyway.
Since they did this with gambling, and banking, it’s not hard to imagine them doing the same thing with all other financial transactions that can’t be regulated effectively in-world. I know the Lindens are thinking this over, and if they reach the conclusion I think they will, I’ll have to look for other work.
Artemis Fate
Aug 29th, 2008
@Adam
Probably because this one drew a ton of attention to himself by asking about it’s legality to a linden, putting signs everywhere claiming a linden said this was legal, and then getting an article written about it. Lindens don’t really go around actively searching for Casinos to shut down, they do it when it’s pointed out to them either by someone or by strange small payments back and forth.
Alyx Stoklitsky
Aug 29th, 2008
I’m pretty flattered to find that my fellow trolls are posting under my name – makes me feel like I’ve moved up some kind of social ladder of e-fame. Durr hurr.
“The GTeam applies the rules unevenly – operations that should be shut down entirely due to extensive fraud and money laundering still operate (I work for one of these, actually, and yes, there are some problems we’re dealing with)”
The GTeam does indeed apply the rules unevenly, but to suggest that Intblubber is in on some ‘extensive fraud and money laundering’ scheme is pretty laughable, because if he was, he’d ACTUALLY. HAVE. MONEY. And I might be able to squeeze a fatter paycheck out of him every week.
As it stands he’s ethically anal to the point of hiring serial griefers like me onto his third-world payroll so that he can feel good about himself for benefitting society by giving me an incentive to be a good citizen.
Or atleast that’s what Prok’s blog says.
Cracker Hax
Sep 3rd, 2008
“While this approach may allow the Lab to hide inconsistent enforcement from public view, in the long run it creates such a climate of uncertainty that only the extremely brave and the foolish treat SL as a serious business platform – despite claims of the fanboys.”
I agree. I have experienced this for myself firsthand, and LL’s policy of “We will do what we want when we want regardless of our written rules” destroys any sense of professionalism or trust between residents and Linden Labs. I have had chats with Linden Labs support technicians who flat out lied to me about their policies, EVEN WHEN I REFERRED THEM TO THE STATED POLICY ITSELF.
I think most of the confusion revolves around weak employee training, but in some cases I think Lindens just enjoy their power-trip. Getting a job as a linden isn’t exactly hard. The only qualifications you need are 1: Be a resident of SL for more than 6 months and 2: Speak english. Even McDonald’s has higher qualifications. (BTW these requirements are taken from the employment section of LL’s site).
In the long run LL would be better off enforcing their written policy to the word, as well as enforcing policy on their own rogue employees (perhaps training them better would be good too). A tremendous amount of hatred has been generated towards Linden Labs because of this, and they really need to do something about it.